20 February 2004
Landlords providing services for people in sheltered housing will receive £15m less next year after an independent review warned that costs were spiralling out of control.
When the government's Supporting People programme got under way 12 months ago, the budget was expected to be about £1.4bn. Instead, it rocketed to more than £1.8bn.
Councils and housing associations were bracing themselves for major cuts in 2004/05 following the review by public service consultants RSM Robson Rhodes.
The National Housing Federation was relieved that the budget, announced on February 12, will be reduced only from £1.816bn to £1.801bn.
But local authorities must also make efficiency savings of 2.5%.
Diane Henderson, head of care and support at the NHF, said the programme was being cut by 5% in real terms.
'Most costs are staff costs and staff expect a pay rise each year,' she said.
'Efficiency savings should not be made at the expense of essential services.'
Supporting People attempts to improve services for people in sheltered housing by separating service charges from rent.